It is important to look at the crypto-based derivatives market when we talk about Bitcoin (BTC). This year, several new companies such as the Intercontinental Exchange’s Bakkt have entered the game and started to plant the seeds for a future in which Bitcoin derivatives will be a major force in the market.
The volumes of derivatives markets are growing up recently. Looking at the perpetual swaps done on BitMEX, for instance, we can see that 2,363 perpetual swaps were done last year and that this year we have seen 2,681 of them, with around 40 days until the end of the year. This is a major growth.
This has led some experts to believe that the derivatives market will have a major impact on the industry, especially when it comes to reducing the volatility that plagues the Bitcoin industry.
Before the derivatives market got so important, most exchanges derived prices in spot trading from larger exchanges which had a higher volume. Even though they did this, not all markets were necessarily highly liquid. Now, however, the growth of derivatives markets, which are more liquid, is set to influence prices.
The more liquidity a market has, the less volatility it will have. Part of the reason why Bitcoin went up and down so quickly was that it is still a small market because it was not so popular yet. Now, the market is more diversified and sophisticated than ever and the volatility will probably be affected by these trends.
The merger will allow the companies to create the largest Bitcoin mining facility in Texas.
As a joint company, Whinstone and Norther Bitcoin AG become a leading global player.
Northern Bitcoin AG is responsible for the operation of a Bitcoin Mining Site in Louisiana and is presently working on developing the biggest Bitcoin mining facility in the world. According to a recent press release from BusinessWire, Northern Bitcoin decided to eliminate their competitor Whinstone US, Inc. by signing a merger agreement with them.
The Whinstone Group has been involved in the blockchain industry for the last five years, establishing its own mining facilities that are located in the US, along with Sweden and the Netherlands. The most recent site for the company was established in Texas across 100 acres, making it the largest data center in all of North America and the largest facility for mining Bitcoin.
The first construction phase of the new facility is scheduled for the first quarter of next year, and the company will end up ranking at the top of the industry worldwide. Two stock-listed corporations are the first customers of this site, which will use much of the 300 megawatts of capacity that will be available at the time.
Along with the focus on blockchain applications, the data center will be usable for the purpose of video rendering and artificial intelligence applications. The co-founder and managing director of Whinstone, Aroosh Thillainathan, elaborated, saying:
“With stock-listed Northern Bitcoin AG, we have found the ideal partner to position our successful business development on the capital market from now on. The joint company has the immediate potential to shape the future course of the global mining industry.”
Mathis Schultz, the CEO of Northern Bitcoin AG, chimed in on this merger as well, commenting:
“With this merger, we are catapulting ourselves faster than originally planned to the top of the world in Bitcoin mining. Whinstone’s team has done a great job over the past few years and is proving its leadership in the blockchain industry by building the world’s largest mining facility.”
Schultz added that their collaboration offers a “dominant leadership position” in cryptocurrency and that both companies are set to “benefit significantly” as blockchain technology progresses.
The joint efforts of the two companies will make their merged brand into a global leader for Bitcoin mining. The arrangement allows the management of Whinstone to complement the management that already exists for Northern Bitcoin AG.
Learn more about Northern Bitcoin at www.northernbitcoin.com.
As the price of bitcoin drops back down to $8,300 level for the first time since October 25th, the Chair of the Shenzhen’s HDFH, which stands for the Hande Financial Technology Holdings, has made an announcement at the today’s second China International Import Expo event.
What he had to say in his speech is that a fund for building a digital bank consortium blockchain has been launched, fund that is based on the experience investors have accumulated in fintech. He added that the first step to invest and to turn a bank digital has to be made, whereas the second step is the building of the consortium blockchain, a consortium that needs to have the digital bank as a main node.
Yillion Bank and ZVCA Involved in the Launch
Yilion Bank is one of the four internet Chinese banks. It has received permission to be involved in online credit business, together with Zhongguancun Private Equity and Venture Capital Association, or ZVCA. The fund is meant to work with both international investors, to be at about $1 billion and to have an investment phase of 6 years. Its exit phase should be 2 years.
This is what CAO Tong, the HDFH’s chair had to say:
“The fund empowers the targets through investment and fintech transformation, while building an innovative global digital bank consortium blockchain, achieving broader value for the participating digital banks.”
The news comes after President Xi Jinping has endorsed the blockchain last month.
Yi Yang, the bank’s governor has said that the launch date hasn’t yet been set. However, Jack Lee, the co-founder and partner at HCM Capital, has stated last month that he expects China to launch a CBDC in the next 2 or 3 months.
Is the China Narrative Running out of Steam?
In our last update, we covered the rapidly developing China narrative as that country’s president, Xi Jinping, favorably spoke about blockchain.
Since then, the market appears to have cooled. Jinping’s statements, which made clear that China is bullish on blockchain technology, didn’t mention any projects by name, nor did he speak about decentralization.
Despite that, coins with ties to China saw impressive gains. NEO, ONT, and QTUM were amongst those who experienced bull market-like increases but have since tapered off.
Were Jinping’s statements nothing but a dream, or is there more where that came from?
China is likely kicking off a blockchain arms race
In an interview with Cointelegraph yesterday, Binance boss Changpeng Zhao said of China’s new stance toward blockchain:
It’s super positive. China’s very pro-technology, so China will invest very heavily in blockchain technology and on the educational front as well. Given that China has now made that move, every other country in the world will have no choice but to follow or move faster. But it’s going to be pretty hard to move faster than China to be honest.
In other words, when China decides to go for it, you’ll be hard-pressed to keep up. The United States and most members of the EU have expressed interest in blockchain technology, but have avoided taking key positions or signaling clear intent to adopt across industries.
Thus far, the private sector has explored blockchain with positive results, but no nation except China, Singapore, and to some extent, Russia has reflected that. However, due to China’s position as the world’s second greatest superpower, their sudden claim to what is likely the greatest incoming tech revolution since the internet is sure to pull others, like the USA, into the ring.
Digital yuan positioning itself as a global currency
Facebook’s Libra project was the first blockchain-based currency to be taken seriously as a global form of money. Owing to that, states around the world felt genuinely threatened by it and have largely blocked the project from advancing.
China, on the other hand, is a sovereign nation. To that end, it is free to pursue the creation of a digital currency for not only national purposes but global ones as well.
In September, Circle’s Jeremy Allaire told CNBC that the digital yuan’s two-tier issuance system was a smart move for breaking the yuan out onto the world stage.
“This becomes a mechanism by which (the yuan) can be used in everyday transactions all around the world,” added Allaire, an internet entrepreneur who also founded video streaming firm Brightcove. “It’s ultimately a foundation for the internationalization” of the yuan.
Can the digital yuan challenge bitcoin for crypto supremacy? The PBOC, China’s central bank, already showed its hand in regard to how it views BTC when bitcoin trading in China was banned back in 2017. Clearly, government officials see bitcoin as a threat to financial policy and would be more than happy to coax it into submission with the crypto yuan.
China’s foray into blockchain simply can’t be ignored, regardless of how quickly the market forgets essential news. While the outcome of these events may not be immediately bullish for the market as a whole, the stage is being set for a significant increase in awareness for blockchain technology.
A startup company focused on decentralized global payments called Radpay was recently been able to raise $1.2 million USD in its latest seed round. According to the payment firm, the round was a success and the valuation of the firm is now floating around $10.2 million USD. This was the first time that Radpay has ever received outside funds.
The two main investors of the round were BlockLaunch and Resiliency Ventures, but investors from Silicon Valley, Arizona and Nebraska were also present in the round.
Radpay was originally created back in July 2018 as a way to innovate in the payment industry. The project is set to be a merchant payment solution that combines the blockchain technology with PCI-compliant card payment structures.
Right now, Redpay is already working together with merchants from retail and e-commerce, call centers, app developers and other specialists in the industry.
Dana Love, the CEO of Radpay, talked about the development of the firm and the latest seed round. Love affirmed that Radpay was created to accept charge cards without crippling merchants with abusive fees and to protect customers from crippling debt at the same time. This way, both sides would win.
He also stated that since the company was founded, it was able to push innovation forward on behalf of the e-commerce industry. With the capital from the seed round, Radpay will be able to start even more partnerships and to upgrade the quality of the services that are currently being offered.
One of the most notorious hackers in the world, Phineas Fisher, has offered a bounty of $100,000 USD to any hacker who is able to break into banks or oil firms to leak information that can be considered beneficial to the public’s interest.
In his newest manifesto, called Hacktivist Bug Hunting Program, the hacker offered to pay other professionals who could hack organizations such as Halliburton, a South African oil company, which was cited in the project. Fisher says that hacktivism can be a very powerful tool when it comes to fighting inequality and capitalism. He stated,
“Hacking to obtain and leak documents with public interest is one of the best ways for hackers to use their abilities to benefit society.”
He also claimed that he was not trying to “make anyone rich”, but that the bounty was just to help hackers to be well-paid for helping society, something that often does not happen.
His “bounty program” was in hopes of inspiring hackers and many institutions have bug bounty programs that are popular everywhere, and often pay hackers to find bugs and threats in systems. He is paying people for finding threats in large private companies.
Attacks to large oil companies are far from rare. In fact, Pemex, an oil firm based in Mexico, was recently hit by ransomware, which halted all activities of the company. The problem was dealt with soon enough and no ransom was ever paid. Most of the attacks have a financial motivation, though, and are not part of hacktivism. Phineas Fisher certainly wants to change that.
The US central bank, Federal Reserve is commonly known as the Fed, has finally agreed that stablecoins pose a threat to the fiat dollar as a global medium of exchange. The Fed has stated that stablecoins like Facebook’s Libra have the capability of being the ‘fresh medium of exchange’. However, the Fed gave a caveat that stablecoins must be well designed and regulated, The Block reports.
The Fed released its Financial Stability Report on Friday which explained that global stablecoins like Libra have the ability to attract widespread adoption in the world.
The report, however, states that if improperly designed coupled with a lack of regulations, stablecoins can pose a threat to the global financial stability. The report says that stablecoins should be easily converted to domestic fiat money on-demand as well as be able to make payments on time. The central bank opines that failure by the holders to liquidate their coins can lead to dire consequences to local and global economies affecting asset prices as well as financial stability.
The central bank states that stablecoins must adhere to the set guidelines and regulations on anti-money laundering as well as counter-terrorism financing laws. The report adds that stablecoin issuers must reveal their terms in a transparent manner explaining how their stablecoin is pegged to a given asset. The report adds that the holder’s data privacy is very important and must be well guarded and maintained.
The Fed supports the recent pronouncements by the G7 group of most developed economies in the world, where finance heads have said that stablecoins like Libra should not be launched until all the underlying regulatory as well as oversight challenges are dealt with. Lately, France and Germany have been vocal in urging other developed countries to disallow the launching of Libra in their jurisdictions until all the concerns raised are dealt with completely.
The report by the Fed can be said to be optimistic albeit the few caveats and warnings. It seems that the Fed is ready to work with the Libra organization in ironing some of the concerns raised by the policymakers.
The legal firm Silver Miller, famous for taking on lawsuits in the crypto world, is also taking the SIM swapping cases that have led to major cryptocurrency losses. The complaints are made against three of the most important phone operators in US, which are Verizon, AT&T, and T-Mobile.
Mobile Operators Broke Their Own Security Policies
Silver Miller has recently made a statement in which it says that it’s responding to SIM identity claims accusations and solving many of the claims. Their research has discovered that even if the mobile operators have reassured their clients that their services are secure, these companies still have broken their own security policies and eased the process of SIM swapping.
SIM Swapping Has Been Syphoning Funds in the Crypto World
Since people are mostly using their mobile phones as 2FA tools, it’s very easy for someone to access their personal banking details or to make account exchanges. SIM swapping has been siphoning funds from many crypto holders in the last few years, and especially before the discovery of new tools for authentication. Silver Miller has been conducting research and discovered that mobile companies not only overlooked their own security procedures, they also encouraged criminal circles to hack their clients’ SIM cards.
In order to rectify the cases, the law firm has decided upon private arbitration and not public litigation. More than this, the identity of their clients is going to be protected. Silver Miller is also inviting people whose SIM has been hacked, especially if they have been promised increased security by their mobile operator, to take on legal actions as there’s a high chance for arbitration and to obtain the desired results without having to go through a trial.
Crypto Users the Most Hit by SIM Swapping
Those who are involved in the crypto space have been the most attacked when it comes to SIM swapping. Only recently, there was a case in which crypto assets valued at $550,000 have been stolen and for which two men were charged. Eric Meiggs from Brockton, Massachusetts, together with Declan Harrington from Rockport, Massachusetts, both in their very early twenties, have been charged with wire and computer fraud, identity theft and conspiracy, after they have targeted and attacked 10 identified victims on US territory.
Those with Prominent Social Media Presences the Most Targeted
Crypto users who have a prominent social media presence are at higher risk, also influencers in the crypto world and those who have a whale wallet. SIM swapping can’t directly affect wallets, yet it can empty accounts and wallets held by a third party. Exchanges are also at high risk, since they have about 6.7% of the Bitcoin (BTC) supply, not to mention there are markets holding smaller altcoins.
Kaspersky Labs, the firm specialized in cybersecurity has noted that SIM swapping has increased and ended up being the main type of attack in the crypto world. Silver Miller is trying to make things right for the ones who have already been the victims of such an attack, by bringing more evidence against mobile operators and being by the side of those who have been hacked.
Last week, Bitcoin was having trouble adjusting per PlanB. An analysis was showing that a previous difficulty reduction of 7% can give some signals that a major bull-run is about to start if a significant increase was about to follow.
When PlanB made the analysis, there was a 4% difficulty increase predicted for the time of the adjustment. However, things have changed and the fall was 0.8%. What’s good to know is that ever since then, the miners have started to churn out blocks, which once again indicates a 4% difficulty increase for Thursday.
PlanB Offers the Most Accurate Predictions
PlanB is a champion when it comes to the stock-to-flow (S2F) Bitcoin model. It has always been accurate throughout the last 9 years, having the most reliable prediction tools and giving a long-term forecast of $100k for Bitcoin by 2021.
PlanB has started to first analyze difficulty adjustments after the 7% reduction from November 7th and 8th. Inspecting this reduction more closely, things no longer seemed so negative because such drops have happened before, not to mention price gains have been indicated when they were followed by a major difficulty increase.
Bitcoin Price Won’t Be the Only One to Swing
At a 4% gain by November 21st, good things are sure to happen. However, seeing that predictions arrived right at the beginning of a new difficulty period, a few slow blocks in this situation may have quite a major effect on expectations. While the predicted adjustment was getting closer to -0.8%, the bull-run was no longer in the cards because the gain wasn’t desired, nor a significant reduction was in the cards for a gain to be expected. However, after a week and a chance at 4%, the bull-run is anticipated for Thursday.
This Has Happened Before
While this has happened before, it still doesn’t ensure a significant bull-run. At the same time, it doesn’t offer any guarantee that any adjustment in the predicted difficulty won’t happen before Thursday. In the event in which everything stays the same and the history of the Bitcoin continues to work as it did until now, the bull-run is sure to deliver.
Mati Greenspan was with eToro for 7.5 years before his departure.
He will be offering his services as an advisor for BlockTV as it launches the BLTV tokens.
Mati Greenspan has continually been a supporter of Bitcoin, working as the Senior Market Analyst of eToro for the last seven years. He’s worked with VIP clients, created viral video content, and worked directly with the Premium Club Network. However, after working with the platform for years, Greenspan announced on Twitter that he is bidding it “a very fond farewell.”
In his Twitter post on the departure, he thanked his colleagues and friends, with special appreciation for Yoni Assia. Assia is the founder and CEO of the eToro social investment network.
After 7.5 years of fantastic mutual growth, today I bid a very fond farewell to @etoro.
Special thanks to @yoniassia, to all my colleagues and friend and to all of you for the outstanding support.
Still, just because Greenspan is leaving eToro behind doesn’t mean he’s done with cryptocurrency. In a follow-up tweet, he stated that he’s already found his next stop, BlockTV. At BlockTV, Greenspan will be taking on an advisory role during an upcoming token sale, which he stated will be announced this week with Bittrex Exchange.
This morning, BlockTV posted a video with Greenspan, speaking with Yael Lavie about his next step in his career. First addressing the impressive time he spent with eToro, Greenspan stated that the platform is “an amazing place,” adding that he loves everything that the company has done. With nearly 800 employees from the 80 employees it began with, Greenspan stated that he never expected he would be with the brand so long.
Leaving the company, for Greenspan, came at a time when he had reached his “maximum growth potential.” For that reason, he made a “radical change.” Lavie stated that Greenspan has been responsible for a lot of progress in eToro, shedding light on his substantial social media presence. From 2017 to now, Greenspan boomed from a few thousand followers and now has 23,000 followers, which Lavie remarked has made Greenspan synonymous with cryptocurrency.
Lavie stated that BlockTV is “happy to announce” Greenspan’s decision to join them as an advisor. Earlier this month, we reported on the upcoming distribution, which will be the sale of the BLTV tokens. The tokens will be available for paying for advertisements to be run on the BlockTV network, and they can be redeemed for tickets to events with BlockTV. However, rather than launching an initial exchange offering or even an initial coin offering, the tokens are just going to be directly listed on Bittrex Global on November 21st of this year. BlockTV already confirmed that there won’t be a private sale.
China injects $25.68 billion in the monetary system and lowest rate for the first time since 2015
Wealthy investors bracing for a recession by stockpiling cash, But UBS says cash might not be the best strategy
Bitcoin meanwhile outperforming every other asset class for the last 10 years
For the first time ever, the Dow Jones Industrial Average closed above 28,000 while the S&P 500 index hit its fourth consecutive record.
These bullish sentiments some market commentators believe are here to stay. JC O’Hara, Chief market technician at MKM Partners said,
“The melt-up continues. While the market has entered ‘overbought’ territory, we are not seeing any intensity from bears at this moment. While an overbought pullback is always a possibility, we continue to like the intermediate-term prospects for equities.”
On Monday, for the first time since Oct. 2015, China’s central bank lowered the interest rate on the regular reverse purchase open market operations to boost market confidence and prop up the slowing growth. PBOC also injected 180 billion yuan into the monetary system.
According to state media agency Xinhua, the US and China had “constructive talks” on trade while the Trump administration is expected to grant a 90-day license extension to allow US companies to continue doing business with Huawei.
The Louder the Denials, the Greater the Odds
However, Charles Hugh Smith, the author of the popular blog “OfTwoMinds.com” isn’t buying it. He said,
“The financial media is loudly declaring the current blowoff top in stocks is not a blowoff top.”
“The delicious irony here is these denials are reliable markers of blowoff tops: the louder the denials, the greater the odds that this is, in fact, the blowoff top that many pundits have been expecting for some time, but always in the future.”
While referring to the US Federal Reserve injecting $60 million per month to manage the repo mass that Fed Chair Jerome Powell said “in no sense” is QE Smith said, “Calling QE not-QE doesn’t make it different than QE.”
Wealthy Investors Bracing for a Recession by Stockpiling Cash
Despite the new heights reached by the market, investors are preparing for a turbulent period ahead that can result in a “significant drop” in the equity benchmark.
According to a recent survey by UBS Wealth Management, 55% of wealthy investors are bracing for a drop in the market before 2020 ends.
In the backdrop of concerns about the US-China trade war and economic slowdown, cash is emerging as the king. As can be seen in the portfolio of high net worth investors, it is ruled by cash.
These wealthy investors are holding 25% of their portfolios in cash, which is much higher than the UBS recommended by 5%.
As a matter of fact, cash holdings have been growing since the financial crisis.
Hoarding Cash, not the Best Strategy, Bitcoin Boat still here
Last week, Axios reported that firms are trying to protect themselves from recession but the pullback in spending by these major companies can actually help in causing recession or intensify the downturn in the economy.
But in a note from September, UBS said stockpiling cash might not be the best strategy. “Cash is an inefficient way of managing portfolio downside risk over the long term,” wrote UBS.
“Cash reduces the portfolio’s return during bull markets, while also providing very little ’crisis alpha’ during market drawdowns,” added the UBS strategists.
Like Ron Paul, former Congressman from Texas concluded in his poll, the majority of the people prefer to hodl Bitcoin than gold, bonds or Fed notes for the next 10 years.
A wealthy person gifts you $10,000. You get to choose in which form you’ll accept the gift.
But there’s a catch: You must keep the gift in the form that you choose for 10 years without touching it.
Also, as we reported, Bitcoin has been outperforming every other asset class, US stocks bonds, gold, real estate, emerging currencies, and oil, for its entire 10-year history. According to analyst Willy Woo,” it’s as performant today as it was in 2009, you haven’t missed the boat.”